Did the Hartz Reforms Speed-Up the Matching Process? A Macro-Evaluation Using Empirical Matching Functions

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Starting in January 2003, Germany implemented the first two so-calledHartz reforms, followed by the third and fourth packages of Hartzreforms in January 2004 and January 2005, respectively. The aim of thesereforms was to accelerate labor market flows and reduce unemploymentduration. Without attempting to evaluate the specific components ofthese Hartz reforms, this paper provides a first attempt to evaluate theoverall effectiveness of the first two reform waves, Hartz I/II and III,in speeding up the matching process between unemployed and vacant jobs.The analysis is conceptually rooted in the flow-based view underlyingthe reforms, estimating the structural features of the matching process.The results indicate that the reforms indeed had an impact in making thelabor market more dynamic and accelerating the matching process.

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